Apple has filed a lawsuit against OpenAI and two former Apple employees, accusing them of misappropriating confidential trade secrets to advance OpenAI’s expansion into consumer hardware.
The lawsuit, filed in the U.S. District Court for the Northern District of California, marks a significant escalation in tensions between the two technology companies as competition in the artificial intelligence sector intensifies.
Apple alleges that OpenAI orchestrated a systematic effort to obtain and use the company’s confidential information through former employees, recruitment activities and supplier relationships to accelerate the development of AI-powered hardware.
OpenAI has denied the allegations.
“We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere,” the company said in a statement.
Apple names two former employees
The lawsuit names former Apple senior system electrical engineer Chang Liu and former Apple Vice President of Product Design Tang Yew Tan as defendants.
According to Apple, Liu failed to return a company-issued laptop after leaving the company and later exploited an authentication flaw to access Apple’s internal network, where he allegedly downloaded confidential hardware-related files.
Apple also alleges that Tan, who spent 24 years working on the iPhone and Apple Watch, emailed himself confidential information relating to Apple suppliers and internal industry reports before joining OpenAI.
The company further claims Tan encouraged Apple employees interviewing with OpenAI to bring Apple components to job interviews for what it described as “show and tell” sessions.
Apple alleges confidential information was used
Apple argues that employing former staff does not give OpenAI the right to use confidential information obtained during their time at the company.
The lawsuit states that more than 400 former Apple employees now work at OpenAI but maintains that any proprietary information they acquired while at Apple remains protected.
Apple also alleges that OpenAI employees sought confidential manufacturing information from Apple suppliers and attempted to use specialised production techniques without authorisation.
The complaint claims Apple contacted OpenAI in February to express concerns that its confidential information had reached the AI company but did not receive a response.
Case could shape AI hardware competition
The dispute comes as OpenAI expands beyond software into consumer hardware following its acquisition of hardware startup io Products, founded by former Apple design chief Jony Ive, in a deal reportedly valued at $6.5 billion.
Industry analysts believe OpenAI is developing AI-powered consumer devices that could eventually compete with Apple’s iPhone ecosystem.
Paolo Pescatore, an analyst at PP Foresight, said the lawsuit reflects growing competition between the companies.
“Apple sees OpenAI moving from partner to potential rival, while OpenAI is trying to reduce its dependence on the iPhone and build a direct relationship with consumers,” he said.
Legal experts say the case could become one of the most significant trade secrets disputes involving the AI industry.
Stanford Law School professor Mark Lemley noted that hiring employees from competitors is generally lawful in California. However, he said allegations involving the theft and use of confidential documents would raise serious legal concerns if proven.
Rutgers Law School professor Camilla Hrdy added that the case could break new legal ground because it centres on hardware trade secrets rather than software, making it a closely watched dispute as the AI hardware market continues to evolve.
The lawsuit also comes despite an existing partnership between the two companies. In 2024, Apple integrated ChatGPT into its Apple Intelligence platform, allowing users to access OpenAI’s chatbot through Siri and other Apple services.
